ZipGo suspends services; Govt says it lacks licence

App-based shuttle bus service startup ZipGo has suspended its services, a decision the company took owing to "harassment" by transport authorities.

The retreat was announced over email to customers last week along with a plea for help. The regional transport office (RTO) had developed a "severe dislike" toward ZipGo, the email stated, asking customers to show their support by writing emails to the company .

"We received thousands of emails within 24 hours, with people saying our services are good and that the company should be supported by the government," ZipGo CEO Jitendra Sharma told ET. The company has launched an online petition on Change.org, he added.

Barely six months old, the on-demand shuttle app has over one lakh downloads. Evidently, the app found favour with commuters as it provided a cheaper alternative to cabs. Transport authorities, however, have repeatedly cracked down on the company, terming its service "illegal."

Narendra Holkar, Joint Commissioner (Enforcement), told ET that ZipGo is neither licensed by the transport department nor the industries and commerce department. "The company used contract carriage buses (Tempo Travellers) as stage carriage, which is a pure violation. In Bengaluru, only BMTC is permitted to ply stage-wise," he said.

When it was pointed out that ZipGo complied with Section 2(7) of the Motor Vehicles Act that deals with contract carriage permits, Holkar said: "Then why have they suspended services? They don't have an aggregator licence."

Last December, transport authorities raided ZipGo's of fice at Koramangala and all vehicles plying under the company's banner were seized.

"We really need a solution. When a startup or business is trying to address a social problem, we need support from the government. The policy has to meet ground reality .The government should walk the talk to help homegrown startups," Sharma said.